Tagged Orphan Drugs

GAO To Launch Investigation Of FDA’s Orphan Drug Program

Acting on a request from three influential U.S. senators, the government’s accountability arm confirmed that it will investigate potential abuses of the Orphan Drug Act.

The Government Accountability Office still must determine the full scope of what it will look into and the methodology to be used. Determining the scope will take some months, said Chuck Young, GAO’s managing director for public affairs.

Earlier this month, Sens. Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Ark.) sent a letter to the GAO and raised the possibility that regulatory or legislative changes might be needed “to preserve the intent of this vital law” that gives drugmakers lucrative incentives to develop drugs for rare diseases.

Grassley’s office said Tuesday they expected the GAO to begin its work in about nine months. The delay is typical as the agency has a queue of requests it is pursuing.

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The senators have asked the GAO to “investigate whether the ODA is still incentivizing product development for diseases with fewer than 200,000 affected individuals, as intended.”

Congress overwhelmingly passed the 1983 Orphan Drug Act to motivate pharmaceutical companies to develop drugs for people whose rare diseases had been ignored. Drugs approved as orphans are granted tax incentives and seven years of exclusive rights to market drugs that are needed by fewer than 200,000 patients in the U.S.

In recent months, reports of five- and six-figure annual price tags for orphan drugs have amplified long-simmering concerns about abuse of the law. The senators’ call for a GAO investigation reflects that sentiment.

“While few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process,” the letter states.

In January, Kaiser Health News published an investigation that found the orphan drug program is being manipulated by drugmakers to maximize profits and to protect niche markets for medicines being taken by millions.

That investigation, which also was published and aired by NPR, found that many drugs that now have orphan status aren’t entirely new. More than 70 were drugs first approved by the Food and Drug Administration for mass-market use. Those include cholesterol blockbuster Crestor, Abilify for psychiatric disorders and the rheumatoid arthritis drug Humira, the world’s best-selling drug.

Others are drugs that have received multiple exclusivity periods for two or more rare conditions.

The senators asked the GAO for a list of drugs approved or denied orphan status by the FDA. It also asked if resources at the FDA, which oversees the law, have “kept up with the number of requests” from drugmakers and whether there is consistency in the department’s reviews.

And they said it would be important to include patient experiences in the GAO review. The GAO does not provide updates on ongoing work but rather reports its findings once they complete an assignment.

The rare-disease drugs have become increasingly popular with pharmaceutical and biotech companies and are expected to comprise 21.4 percent of worldwide prescription sales by 2022, not including generics, according to consulting firm EvaluatePharma’s 2017 orphan drug report.

That’s in part because of the exorbitant prices that can be charged. Of the top 100 drugs in the U.S., the average cost per patient per year for an orphan drug was $140,443 in 2016, compared with $27,756 for a non-orphan, EvaluatePharma said.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Categories: Cost and Quality, Health Industry, Pharmaceuticals

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$89,000 Orphan Drug Gets A New Owner — And Likely A New Price

Marathon Pharmaceuticals’ controversial $89,000-a-year drug that has drawn outrage from patients and intense questioning from Congress is getting a new owner.

After striking a deal Wednesday evening, PTC Therapeutics announced plans early Thursday to buy the Duchenne muscular dystrophy drug Emflaza from Marathon for $140 million in cash and stock. The drug’s new price was not announced.

While declining to answer questions about price, PTC Chief Executive Stuart Peltz built up the value of Emflaza, which is a steroid, in an investor conference call. Emflaza, he said, is an “important new drug” and “disease-modifying.”

On price, PTC believes “a change needs to be made, however it’s premature to speculate exactly what that will be,” Peltz said.

Emflaza was approved as an orphan drug with the Food and Drug Administration last month, and PTC executives said they expected it to treat 9,000 Duchenne patients in the U.S. The drug has been available outside the U.S. for decades under the generic name deflazacort.

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It is a steroid used to lessen the symptoms of Duchenne, a fatal muscle-wasting disease that affects mostly boys. For years, many American patients have imported the generic version at a cost averaging from $1,000 to $1,600 annually. The cost typically was not covered by insurers.

But the controversial price difference between the older generic and the newly approved drug has outraged patients and lawmakers.

“It’s just all insane,” said Dana Edwards, a New Jersey mother whose 12-year-old boy uses deflazacort, from overseas, to treat his Duchenne muscular dystrophy. Edwards said the generic costs her about $1,000 a year, and she worries that the PTC purchase will not affect Emflaza’s price.

“Honest to God, I think it’s going to have to remain pretty high,” Edwards said. “I pray to God that they do right by our community.”

Shortly after Marathon announced the price of Emflaza, Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) sent a letter to the company demanding answers about pricing, saying the drug isn’t new. Marathon executives responded by delaying the drug’s market launch.

In early March, seven Democratic U.S. senators and one independent also demanded answers from the company in a letter that said they’re concerned that the price “exploits” patients. Marathon had responded by saying it was committed to ensuring that all patients had access to the drug.

Sanders and Cummings sent a letter to the FDA this week, asking about the approval process for Emflaza and saying that the price was “especially troubling” in light of the financial incentives Marathon received under the orphan drug approval process.

Those incentives include a seven-year market exclusivity for the drug as well as tax breaks on development and a waive in fees. Marathon also won a pediatric review voucher with its Emflaza approval. And the lawmakers’ letter zeroed in on the voucher program, which Congress approved in 2012 to encourage the development of drugs for rare pediatric disorders. Companies can keep the voucher to expedite the approval process for their next drug or sell it to another company. The vouchers have fetched prices of $350 million.

On Thursday, a Sanders aide confirmed that the lawmakers will continue examining the pricing and approval process for Emflaza.

Marathon executives declined interview requests. But the company sent a letter to the patient community stating that the deal will “create the opportunities needed” to make sure the greatest number of Duchenne patients could get the drug.

PTC’s Peltz, just as Marathon’s executives said last month, told investors that the company would reach out to the Duchenne community, physicians and payers. The company plans to disclose its price after the acquisition is finalized, which is expected by the end of June.

As part of the deal, Marathon will be entitled to payments based on Emflaza’s sales plus a one-time $50 million payment when the drug reaches an undisclosed sales-based milestone. In addition, Marathon executives will remain on the transition team to aid in the drug’s U.S. rollout.

PTC sees Emflaza as a first step into the U.S. Duchenne market, Peltz said. The company talked of pursuing a pediatric approval for the drug’s use.

PTC has another drug, Translarna, which received conditional approval for use in the European market to treat people with a specific mutation of Duchenne. The drug targets a different set of patients than those treated by Sarepta Therapuetics’ Exondys drug. It is currently being reviewed for use in the U.S.

Parent Project Muscular Dystrophy, a patient advocacy group, released a statement saying that PTC has a “long history” with the community. PPMD’s statement urged PTC to be “transparent about the methodology they will use when establishing their pricing.”

“The players may have changed,” PPMD said, but that doesn’t mean concerns about pricing have lessened.

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

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